Tuesday, December 24, 2013

Santa Claus, Christmas carols, gifts, endless queues at the malls and the local
post offices, house decorations and more human
externalities! Christmas is here! Hohoho!! But, what does Christmas mean for us? Why "Merry Christmas"? Does Santa really exist? How could Christmas decoration both in houses and in retail stores affect our psychology? Marketers and psychologists are actually curious
human beings that have studied almost every aspect of human and consumer behavior, including Christmas psychology!

Santa Claus really exists?

Santa Claus,also known as Saint Nicholas, Father Christmas or simply "Santa", is a mythical figure with legendary, historical and folkloric origins who, in many Western cultures, is said to bring gifts to the homes of the good children on December 24, the night before Christmas. Images of Santa Claus were further popularized through Haddon Sundblom’s depiction of him for The Coca-Cola Company’s Christmas advertising in the 1930s. The popularity of the image spawned urban legends that Santa Claus was invented by The Coca-Cola Company or that Santa wears red and white because they are the colors used to promote the Coca-Cola brand. Historically, Coca-Cola was not the first soft drink company to utilize the modern image of Santa Claus in its advertising: White Rock Beverages had already used a red and white Santa to sell mineral water in 1915 and then in advertisements for its ginger ale in 1923.

Kids believe in Santa Claus as a function of age. Kids are also more likely to believe if their parents encourage them to do so [Anderson & Prentice, 1994]. But it’s not clear that these beliefs are a sign of greater gullibility or even a greater interest in fantasy.

Actually, researchers found that a belief in Santa was unrelated to other measures of a child's interest in fantasy [Prentice, 1978]. And a recent series of experiments conducted at Harvard found that kids make important distinctions between beliefs in folkloric, fantasy characters and beliefs in other unseen, but scientifically-established, entities. Kids who professed to believe in Santa were nonetheless less certain about it than they were about the existence of oxygen or germs. Another set of experiments revealed that 4-year old kids don't invoke magical explanations for things that happen in the real world-not unless those things otherwise seem impossible [Rosengren & Hickling, 1994].

What happens when kids finally penetrate the veil and reject our fantasies? We might feel a little awkward or wistful. But the kids don’t appear to be heartbroken. When researchers questioned children who had stopped believing in Santa Claus, a milestone they reached around the age of 7, kids reported feeling pleased.

They had figured it out. They were enlightened now.

According to Anderson , it was THE PARENTS, NOT THE KIDS, who reported feeling a bit sad..

Why Merry Christmas?

Tim Kasser, an American psychologist, known for his work on materialism & Kennon Sheldon, professor of Psychological Sciences, University of Missouri, noticed 10 years ago that "More happiness was reported when family and religious experiences were especially salient, and lower well-being occurred when spending money and receiving gifts predominated. Engaging in environmentally conscious consumption practices also predicted a happier holiday, as did being older and male. In sum, the materialistic aspects of modern Christmas celebrations may undermine well-being, while family and spiritual activities may help people to feel more satisﬁed". Thus consumerism is not always the answer.

Christmas decoration

Werner & Brown [Journal of
Environmental Psychology, 1989] suggested that most people like
decorating their house for Christmas. One possible reason for this behavior
could be the desire to communicate friendliness and cohesiveness with
neighbors. Stimulus homes had been preselected to represent the four cells of a
two by two factorial design crossing the presence/absence of Christmas
decorations with the resident’s self-rated social contact with neighbors
(low/high). As expected, a main effect for the decorated factor indicated that
raters used Christmas decorations as a cue that the residents were friendly and
cohesive. Decoration interacted with sociability in a complex but interpretable way.

In the absence of Christmas decorations, raters accurately distinguished
between the homes of sociable and nonsocial residents; in open ended comments,
they attributed their impressions to the relatively more ‘open’ and ‘lived in’
look of the sociable residents’ homes. When Christmas decorations were present,
raters actually attributed greater sociability to the nonsocial residents,
citing a more open appearance as the basis for their judgments. The results
support the idea that residents can use their home’s exterior to communicate
attachment and possibly to integrate themselves into a neighborhood’s social
activities.

As regards retail stores and their Christmas decoration, the
following video, that explores current neuromarketing methods (measuring
stimuli and emotions to retail stores Christmas decoration), might shed light
on unconscious consumer decision-making processes:

Friday, December 13, 2013

This stage is the most time-consuming stage of the data mining process. Data is never clean
and in a form suitable for data mining. There are few typical data corruption problems in business databases such as duplication of the records, missing data fields, and presence of outliers. The preprocessing step involves integrating data from different sources and making
choices about representing or coding certain data fields that serve as inputs
to the data discovery stage. Such representation choices are needed because
certain fields may contain data at level of details not considered suitable for
the pattern discovery stage. For
example, it may be counterproductive to represent the actual date birth of each
customer to the data discovery stage. Instead, it may be better to group
customers into different age groups
and the chosen age groups should have
some significations for the research goal. It is important to remember that the preprocessing stage is
a crucial step.The representation choices
made at this stage have a great bearing on the kinds of the patterns that will
be discovered by the next stage of data discovery.

Patterns & Market Segmentation

Since there are so many ways we, human beings, are
different, it should not be surprising that we would differ in our needs for
automobiles. While there are many factors/variables that contribute to these
differences, we are considering the following factors for presenting our data
mining framework for the aforementioned example: vehicle image (Table 1), customer anticipated feelings (Table
2), and
demographics (such as age, sex, income, occupation, education etc). The
demographic factor plays an important role in the proposed analysis.

For example, consider how customer needs and preferences for
an automobile change as one moves demographically from college student to
management trainee; changes in income, occupation, and educational status each
contribute to a changing set of customer needs for a variety of products such
as an automobile. Many other variables can be incorporated as well.

There are mainly three different techniques to perform
market segmentation:

• Clustering:
this approach implies data grouping or partitioning

• Association:
this approach seeks to establish associative relationships between different
variables in the database

• Visualization:
this approach consists of providing the user with an immersive virtual reality
environment so that the user can move through this environment discovering
hidden relationships

Evaluation, Interpretation & Knowledge Discovery

To test how well the identified segments perform when
predicting preferences for new customers, two approaches can be considered:
train and test error estimation, and cross validation.

After the prediction accuracy is verified by one of the
above methods, the segments will be evaluated by the business people in order
to determine the usefulness of the segments. The evaluation of usefulness of
the market segments should be made by the business team with respect to the
following characteristics:

Substantiality: (segment size): The market segments
are large or profitable enough to serve.

Measurability: (segment profile): The market segments can be
identified and measured in terms of data already available. The segment
identification is very important: Segments that are based on meaningful
differences in customer needs but lack clear segment identification will fail
because the segment identity will not be known and an actionable marketing strategy
cannot be developed.

Actionability: Effective programs can be
designed for attracting and serving the segments. The market attractiveness
depends on market opportunity, competitive environment and market access.

If a segment fits the company’s objectives, the company must
decide whether it possesses the skills and resources needed to succeed in that
segment. If the company lacks the strengths needed to compete successfully in a
segment and cannot readily obtain them, it should not enter that segment. Even
if the company possesses the required strengths, it needs to employ skills and
resources superior to those of the competition in order to really win a market
segment. Once the company has decided what segments to enter, it must decide on
its market positioning strategy - on which positions to occupy in its chosen
segments[D. Raicu, DePaul University).ConclusionA theoretical, qualitative data mining framework for automatic gathering
of relevant and unbiased data was proposed. As a result, the initial investment
of producing a new product vehicle without being certain that it will be
satisfying people’s needs will be eliminated. Discovering a-priori segments of
people being interested in a certain product will also help the managers focus their advertising, promotion, and sales efforts on those categories of
people and thus, the time and costs will be significantly reduced.

Monday, December 02, 2013

Data mining can be defined as the process of "discovering patterns, meaning and insights in large datasets by using statistical and computational methods". Data mining works to analyze data stored in data warehouses that are used to store that data that is being analyzed. That particular data may come from all parts of business, from the production to the management. Managers also use data mining to decide upon marketing strategies for their product. They can use data to compare and contrast among competitors. Data mining interprets its data into real time analysis that can be used to increase sales, promote new product, or delete product that is not value-added to the company.HistoryData mining was born in the fields of Statistics and Computer Science (some might say Artificial Intelligence) and may also be referred as “Statistical Learning”. From a statistical perspective, most early and recent advances coming from Statistics have come from the Stanford Statistics department school of thoughts like Bradley Efron, Jerome H. Friedman, Trevor Hastie and Robert Tibshirani. By the way, don’t forget that Stanford University is only 7 miles away from Google.

Data Mining FrameworkUsing data mining techniques, we, marketers, need to master an approach that will provide the decision makers with a-priory knowledge about customers’ preferences and needs. Since there are many different kinds of customers with different kinds of needs and preferences, a simple, solid approach is meant to be a tool for performing market segmentation: divide the total market, choose the best segments, and design strategies for profitability serving the chosen segments better than the company’s competitors do. The example developed below is described for product development in auto industry, but it can be successfully implemented for any other applications where it is necessary to find the correlations between the customer feelings or perceptions and the physical characteristics of a product. Yes, correlations, even through our statistics lenses. Yes,arithmophobia is over, my friend!

UnderstandingAny data mining application should start by understanding the business goals of the application since the blind application of data mining techniques without the requisite domain knowledge often leads to the discovery of irrelevant or meaningless patterns. In order to understand the target customers of an automotive company, it would be helpful to examine the relationships between the vehicle image/attributes and the customer emotional benefits that are tied to psychological needs, personality traits, and personal values. Thus, data mining can enable us to understand more completely how product specific characteristics relate to customer needs and the benefits a customer hopes to obtain from them. For instance, for many people, cars, homes, restaurants and vacations provide emotional benefits as well as rational benefits. However, for a wealthy person who has everything, the emotional benefits provided by status, prestige and superiority of an expensive automobile could outweigh rational benefits such as gas economy, lower maintenance and insurance costs, and resale value.

A target audience perhaps? "Free to do anything, in control, confident, sporty but with family."

Therefore, it will be beneficial to have a tool that will help us to respond to questions such as: What and how many of the personality attributes used to describe the customer might be shaped by the vehicle’s image? What kind of vehicle this customer or group of customers will buy?Data selectionThis step calls for targeting a database or selecting a subset of fields to be used for the data mining. The following issues should be considered in developing a plan for collecting data efficiently:

Evaluation of existing data sources

Specification of research approaches

Data gathering (contact methods, sampling plans and instruments)

The survey research is a simple, efficient method to collect data. One of the advantages of the survey research is flexibility because it can be used to obtain many different kinds of information in many different situations. Furthermore, depending on the survey design, it may also provide information quicker at a lower cost compared to manual processing. The survey may be in the form of a questionnaire that is very flexible as there are many ways to ask questions. In preparing the questionnaire, only the questions contributing to the research objectives will be asked. The questions may be closed-ended, as they include all possible answers. In designing the survey, we also make sure that the questions are simple, direct and arranged in a logical order. The first question should create interest if possible, and difficult or personal questions should be asked last so that respondents do not become defensive.

Instead of a traditional mail questionnaire, a more modern approach is the computer interviewing process, in which respondents sit down at a computer, read questions from a screen, and type their own answers into the computer at their own leisure. The beauty of this approach consists of its multiple benefits. As a first benefit, the respondents’ answers are automatically stored in a database. Furthermore, the survey is posted on the web and it can be accessible by an unlimited number of people. Filling out the survey becomes a non-time consuming task even for a busy person: the survey is on the web and it is accessible for anybody at any time; the submission of the completed survey requires only a ‘click on’ action executed by respondent, action possible through an interactive survey implementation. Third, the computers might be located at different locations such as auto shows, dealerships, or retail locations. The biggest benefit is the collection of more relevant data since people present at those locations are most likely willing to answer correctly to the questions because they are interested in automobiles. The approach can be implemented such that the data is gathered from numerous computers at different locations and stored in a unique and global database. As a fourth benefit, same survey format will be accessible to different categories of people: expert people (such as car designers) or people less familiar with auto domain characteristics. The large number of respondents and their diversity give more reliability on the results than small samples.